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How Uber and Taxify Push Kenyan Drivers to Poverty




Nairobi, East Africa’s largest city and financial hub, is famous for its nightmare traffic, chaotic public transport system, and badly maintained roads. Getting to work in Nairobi is a daily ordeal.

Nairobi’s middle class have abandoned the chaotic public transport for uber-like transportation. Thousands of Uber and Taxify (now Bolt) drivers have been moving Nairobi residents to their destinations for years. In recent months, drivers have been protesting against poor working conditions and poor pay. However, no one is coming to their aid. The government is not listening, and seems it does not care. During one recent protest at Uhuru Park in central Nairobi, drivers were dispersed, 80 of them arrested, and their cars confiscated.

“Those drivers had to pay 50,000 shillings to get their cars back,” Mike Mwangi says.

One reason drivers took an industrial action was to force negotiations with Uber and   Taxify, Kenya’s two biggest ride-hailing firms because of low pay rate. When Uber and Taxify first launched in Kenya, they paid their drivers generously; some were making as much as 100,000 shillings, a fortune to many. However, in the past one or two years, pay has been cut drastically, and rising of fuel prices have made things worse.

“It is because of our government we are suffering,” says Mwangi, who has been driving for both Uber and Taxify in the last two years. He says his earnings have fallen by a half and after paying for fuel and other expenses. He says he gets around 80 shillings in a trip that his client paid 500 shillings.

For example, one of President Uhuru Kenyatta’s sons has invested in ride-hailing apps. He owns fleet of cars operating under Uber and Taxify. Uber loans these cars to drivers at around 1.2m shillings while they may have been purchased at around half a million shillings. Businessman Chris Kirubi, former Nairobi government among others political and business leaders also have unspecified number of cars in the ride-hailing business.

While politicians and other businesspeople continue to make money out of these apps, drivers remain trapped in loans. They cannot stop driving even if they want to because they have to repay their loans.

Rates per kilometres have dropped from 65 shillings to 37 and now stand at 27. Mwangi says the government does not want to regulate the ride-hailing companies and force a higher minimum wage. He says some government officials invested in these companies, and others have their cars driven in these platforms.

Drivers are bearing the brunt of price cuts. Mwangi says he is stuck in traffic for more than two hours, wasting fuel and time, and he does not get extra money for that.

“We cannot afford to eat at proper restaurants; we eat at kipandes. We take a chapatti and a cup of tea or a few slices of bread. That is what we can afford,” David Onyango, who drives for Taxify, says. Kipandes are informal restaurants mainly operated by women on the roadsides.

“That’s how we survive, but people see us in these cars thinking we are doing fine. These apps benefit the riders.”

The Kenyan drivers lack strong unions to fight for their rights.

Driving for Uber in other parts of the world is not as in Kenya. While Kenyan drivers suffer, their counterparts in the developed world earn decently.

For example, the typical American Uber driver earns $16 (1,000 shillings) an hour ($10 dollars after expenses), higher than the federal minimum wage. In London, Uber drivers earn $14 dollars per hour.

A recent survey also shows Uber drivers reporting higher level of life satisfaction than other workers do.



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Business and Finance

Somalia’s largest telco launches women-for-women tellers




Hormuud Telecom, Somalia’s largest telecommunications company, has established tellers serving only women in the capital Mogadishu.

In a video posted online, women tellers were seen serving fellow women customers.

Hormuud is a leader when it comes to offering equal job opportunities to both men and women. In the last few years, it employed more women than any other company.

Hormuud was founded in 2002 and has since grown into a Telecom giant, offering affordable services.

Hormuud has more than 20,000 full-time and part-time employees.

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Business and Finance

Somaliland and Puntland receive higher diaspora remittances than the rest of Somalia




Every year, members of the Somali diaspora send approximately $1.4b to their family, relatives, and friends in Somalia, exceeding all humanitarian and development assistance to the country. The remittances comprise around 25 percent.

Somalia’s annual overseas development assistance is estimated at $1.3bn.

Funds transfers from overseas citizens back into their home country play a very important role in countries like Somalia, where a large number of its citizens fled to the outside world, especially to the West, following the collapse of the state. These transfers help recipient families pay for their monthly basis needs such as food, water, education, and healthcare. It also helps families get access to credit. Sometimes, it helps many Somalis survive recurring droughts.

This money—usually small monthly contributions taken directly from working Somalis in the diaspora—is nothing short of a lifeline for the Somali people.

But what is less understood is how that money, the diaspora remittances, can contribute towards inequality among Somali communities, and which regions in the country receive more than others.

Yet only an estimated 40 percent of the population receives remittances. For these households, monthly remittance receipts range from $50 to more than $300, with an overall monthly average income from remittances of $229.

A report by the Rift Valley Institute, a non-profit organisation operating in Eastern and Central Africa, shows the relationship between remittances and the relative vulnerability of certain communities, and how remittances can contribute towards inequality.

According to the report, there is a clear link between the average levels of remittances, and the regions in which they are received. Regions in the north, Somaliland and Puntland, receive on average $254 per month, while regions in the south of the country, excluding the capital city, Mogadishu and the port city of Kismayo, receive $119; a significantly lower monthly total.

Populations who do not benefit from remittances are disproportionately found in the south, where there is a larger rural population, and where marginalised and ethnic minority groups are mainly found.

There is also a clear link between the distribution of remittances and dimensions of migration. The Somalis, who out-migrated first, predominantly came from the north of the country, particularly from Somaliland and Puntland. These diaspora populations are now well-established in the United States and Western Europe. These patterns have been further entrenched by subsequent migration, which is facilitated by remittance transfers from existing migrant communities in host countries and other formal processes, including family reunification programmes.

The rebellion in Somaliland (now a self-declared republic) against the government of President Siyad Barre, in the late 1980s, led to a mass exodus to foreign countries, especially to the US and the UK, before the rest of the country followed suit after the collapse of Barre’s government in 1991.

This regional inequality was considered an important factor in how the dynamics of the Somalia famine of 2011 developed, with remittance-receiving communities being less vulnerable to famine.

Clan dominance and socio-economic profile of particular clans also affect how remittances are distributed.

The 2017 drought and associated humanitarian crisis showed how Somali clans demonstrated contrasting abilities to mobilise external support and, by implication, levels of resilience.

The large and dominant clans, as well as the small but well-connected ones, were able to raise funds abroad due to their historical migration patterns and the size of their current diaspora populations.

However, clans that are agro-pastoralists and whose communal identity is based on a combination of family-lineage and land-based territory responded to the drought less successfully.

Clans whose family structures are looser and who historically have had a less prominent national political profile, and whose diaspora is smaller, raised comparatively little money from abroad.

Despite playing a crucial role in Somalia’s economy and helping families meet their basic needs, remittances do contribute to inequality.

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Business and Finance

As Stability Returns, Somalia Moves Toward Becoming Major Oil Producer

Plans will be announced in December when the new Petroleum Law, currently before the Senate, will have been passed into law.




Somalia will launch its first-ever crude oil licensing round, with details about it to be announced in December, according to the country’s Minister of Oil.

Plans will be announced in December when the new Petroleum Law, currently before the Senate, will have been passed into law.

“We are presenting up to 15 blocks,” Abdirashid Mohamed Ahmed said, adding that the results from seismic research conducted at these blocks was promising, suggesting they could hold as much as 30 billion barrels of crude.

The minister spoke at Africa Oil Week in Cape Town where he announced first round of bidding on offshore acreage blocks, mainly in southern Somalia.

Abdirashid made a point of noting all 15 blocks were far from the maritime border with Kenya, which is currently the object of a dispute between the two east Africa neighbours.

Kenya and Somalia are engaged in a diplomatic row after Nairobi accused Mogadishu of auctioning part of its oil blocks in the Indian Ocean to international companies at a London event in February.

This prompted Nairobi to recall its ambassador in Mogadishu and ordered the Somali ambassador in Nairobi to leave.

Somalia denied Kenya’s accusation, saying it was presenting the results of seismic surveys and showcased possible locations in the country where oil reserves can be extracted in the future.

In 2014, Somalia sued Kenya at the International Court of Justice (ICJ), requesting the boundary be drawn to reflect a diagonal line in its favour.

The Somali government said it will tender several offshore oil and gas blocks later this year despite criticism from the opposition that the tender should wait until the country gets a law and regulations governing the use of the country’s natural resources.

The tender has been postponed for 2020, but the potential reserves it would open up access to have been increased substantially.

Somalia has attractive oil and gas prospects, survey results suggesting the Horn of Africa nation could be sitting on 100 billion barrels which could make it one of the world’s major oil producers.

After recent improvements in security that saw al-Shabab lose control of major towns and a decline in piracy off the coast of Somalia, the government saw an opportunity to start exploration activities.

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